RRE Penalties: What Actually Happens If You Don't File

Civil penalties for negligent violations are $1,394 per violation. If FinCEN finds a pattern of negligent activity across multiple transactions, that cap rises to $108,489. Willful violations, where you knew you should file and chose not to, carry penalties up to $69,733 per violation. For the most serious willful violations, penalties can reach $278,937 or the total dollar amount involved in the transaction, whichever is greater.

Criminal penalties are separate and can be imposed on top of civil penalties for the same violation. Criminal BSA violations carry fines up to $250,000, imprisonment up to five years, or both. These are not mutually exclusive with civil penalties. You can be fined civilly and prosecuted criminally for the same failure to file.

The difference between a $1,394 civil penalty and a $250,000 criminal fine comes down to intent. Negligent means you should have filed but did not, through carelessness or ignorance. Willful means you knew the obligation existed and deliberately chose to ignore it, or you were so reckless about learning your obligations that the law treats it as willful.

A title agent who had no training, no procedures, and genuinely did not know about the rule might face negligent penalties. A title agent who attended a FinCEN compliance seminar, received company policy updates, and still decided not to bother with the reporting on a suspicious all-cash LLC purchase is in willful territory. The same agent doing this across multiple transactions is in criminal territory.

Regulators are not going to chase down every single first-time oversight from a small title office. What draws enforcement attention is a pattern: multiple missed filings, no documented procedures, no training records, and no evidence that anyone in the organization tried to comply. That pattern suggests either willful disregard or such complete indifference that the law treats it the same way.

A single honest mistake with documented good-faith effort behind it is manageable. Your office had a procedure, your agent followed it, and one file slipped through because of a factual misunderstanding. That is defensible. Having no procedure at all for 50 closings involving entity buyers paying cash is not.

Documentation is your best defense. A written determination for every closing, even ones that are clearly not reportable, shows that you have a process and you follow it. When an auditor or examiner looks at your files, they want to see evidence that you asked the right questions and made a reasoned decision, not that you assumed everything was fine and moved on.

Specific controls that matter: a documented determination procedure that your team follows consistently, training records showing that staff understand the rule, deadline tracking with escalation when data collection stalls, written designation agreements when responsibility shifts, and five-year retention of all determination records, certifications, and agreements. None of this is complicated. It just has to actually exist and actually be followed.